There has also been a similar admonition to focus on competitors and their strategies. As firms become more aware of the competitive moves of rival firms, they will be able to develop effective counter-moves (or anticipatory moves) that should also enhance firm performance. Competitor orientation refers to a firm’s ability to identify its competitors, understand and respond to the strengths, weaknesses, capabilities and strategies of those competitors, and constantly collect competitor information from the marketplace (Han et al., 1998; Im and Workman, 2004; Narver and Slater, 1990). It involves identifying
the firm’s main competitors, their strengths and weaknesses, and their long-term capabilities and strategies (Slater and Narver, 1994b). Scholars recognize that firm executives may be unable to monitor both customer needs and competitor moves simultaneously because executives face cognitive limits regarding how much they can attend to at any given time, and customer needs and competitor moves force managers to attend to different types of information (Day and Wensley, 1988; March and Simon, 1958; Ocasio, 1997). Consequently, executives engage in processes of selective attention and  Simplification (March and Simon, 1958; Slater and Narver, 1994a). Both customer-focus and competitor-focus tend to be externally oriented, or ‘‘outside-in’’ (Baker and Sinkula, 1999; Celuch
et al., 2002). That is, they tend to focus the firm’s attention on factors external to the firm. However, there has been increasing realization in the strategy literature that a preoccupation on external factors overlooks vital internal firm factors (Barney and Zajac, 1994; Henderson and Mitchell, 1997). Recently, the strategy literature has turned its attention to an ‘‘inside-out’’ orientation (Baker and Sinkula, 1999; Celuch et al., 2002), focusing on internal firm factors – notably a ‘‘learning orientation’’ (Bunderson and Sutcliffe, 2003; Garvin, 1993; Senge, 1990).
1. We rapidly respond to competitive actions that threaten us
2. Top management regularly discusses the strengths and strategies of competitors
3. Our salespeople regularly share information within our organization concerning competitors’ strategies